Why Your Guest Review Index is Your Hotel’s Most Powerful Key Performance Indicator, with Adele Gutman

Episode Transcript

Adele: Fine is not fine. Four is, “It was okay. I’m not in love.” I’m not in love means I’m for grabs by the next hotel that sends me an email with a special offer, etc. But if I love a brand, I’m much more likely to stay more frequently, to bring my friends with me, to look for upgraded experiences, to look for other hotels within your brand. And we’re in it to win it when we’re only going for five-star reviews.

Robin: Welcome to “The Innovative Hotelier” podcast by “Hotels” magazine with weekly thought-provoking discussions with the world’s leading hotel and hospitality innovators. Welcome to “The Innovative Hotelier” podcast brought to you by “Hotels” magazine. I’m your host, Robin Trimingham. And my guest today is Adele Gutman, renowned hospitality, culture, and guest experience consultant. And today, we’re chatting about why your guest review index is your hotel’s most powerful key performance indicator.

This green technology podcast is sponsored by Blink Charging. About 50% of vehicle sales will be electric by 2030 and EV charging is the hotel amenity drivers need. Blink is the leader in EV charging and offers the most flexible solutions and business models. For more, visit blinkcharging.com. Welcome, Adele.

Adele: Thank you so much for having me today, Robin. I’m excited to talk to you about my favorite topic.

Robin: Well, I’m looking forward to this as well because we both speak hotel. So I think we’re gonna have a great conversation and maybe share a couple of our experiences together. Let’s start this off though. It’s widely known in the hotel industry that they tend to consider RevPAR or revenue per available room to be the most important financial indicator. What got you first interested in looking at guest experience as a way to drive revenue?

Adele: Well, that’s a great question. I too was a sales, marketing, and revenue person. And I was one of those people who was looking at our occupancy, our average rate. And on top of RevPAR, you know, I was also considering what the cost of acquisition was in our marketing. So when I saw that of the four hotels, I used to be the vice president of sales, marketing, and revenue for the Library Hotel Collection, when I saw that our four hotels in New York City were all in the top 20% on Tripadvisor…

So I was looking to monitor and optimize our online visibility, making sure that everything was correct and good things were being said about us. I never looked at user-generated content before until Tripadvisor. And when I saw one of our hotels rise to be on the first page of Tripadvisor, the reservations were just flying off the hook those days.

The telephones were ringing and whatever price we had it at for the day, we could actually increase and people would still take it because they wanted to be at one of the top-rated hotels in the city, even if they had never heard of our hotels before. So getting great guest reviews was a vehicle to getting more eyeballs on our hotels, to get a lot more consumer confidence about their decision to choose our hotel. And it impacted how they valued the experience.

The perceived value of a hotel that’s consistently getting five-star reviews is much different from a hotel that’s getting mixed reviews, five-star, one-star, five-star, three-star, five-star, two-star. You may have a lot of five-star reviews that indicates that you do know how to make people happy, but you need to do it all the time in order to get that elevated visibility through the OTAs, through the review sites, and great word of mouth at the same time, good old-fashioned word of mouth.

Robin: I agree with you. There can be a tendency to rest on your laurels when you have lots of five-star reviews and sort of not pay quite as much attention as you might when it comes to some of those two and three stars and saying, “Oh, well, you know, maybe we had an off day.”

As much as social media has changed everything in how we market hotels and how brands are perceived, there are still some managers out there who are tending to over-focus on metrics like occupancy rate, RevPAR, and ADR. They might be missing the bigger picture. What would you say about that?

Adele: There’s nothing wrong with focusing on your revenue, your RevPAR, etc. But imagine the cost of acquisition for a new customer. If you are working so hard to make sales calls knocking on those doors saying, “Please, can we have your business?” Ask for the business, it’s such an important thing. But when you go and make that sales call, that corporate travel manager, that travel agent, that meeting planner is very likely going to look at the reviews.

They’re probably not going to make a major decision about changing from one hotel over to yours if you don’t have a stellar reputation. And the only way that they’re gonna consider a hotel that has lower review scores than the one that they’re already going to, that they may already be content with, is if you are negotiating yourself out of your revenue. So if you want to be able to command the reservations and the new accounts you want on your sales calls, you want your reputation to stand behind you as a foundation for all your sales efforts.

Same with advertising. You put out an advertisement. Somebody says, oh, look at this pool. Oh, look at this restaurant. It looks so cute and adorable. Look what I just saw on social media. Wow. That looks like an amazing experience. And then cut to let’s look at their reviews and people say, “It’s great. I loved it. Never stay there.” “I really enjoyed the experience.” “Oh my goodness, whatever you do, don’t come during these months.” “Don’t come if you have a family.” Don’t come if blah, blah, blah.

So one person I interviewed on my podcast, “Get Great Guest Reviews” said to me, one bad reservation is gonna turn away 30 prospects that came and then decided not to go with you. So if you care about not just acquiring the business, but also keeping the business, wouldn’t it be easier for your sales managers if they could rebook that same meeting again, and then spend their time and energy adding new meetings, bringing in new accounts, not just replacing the accounts that left?

And accounts leave not just because they were unhappy per se, they could just leave because it was a good experience, it was four-star. Everything happened the way the sales manager said, or what it said in the advertisement was pretty much spot on. But was I in love? No, because of these tiny little things that diminished my overall joy.

And when I go on vacation with my family, I wanna feel like a VIP. I wanna be surprised by how much everybody will do to make me and my family happy, or make me and my meeting attendees happy, or make me and my corporate travelers happy because they do so much for our company. They’re, you know, away from their families and everything. And they sacrifice so much. I want them to feel that they’re having a great experience and really cared for, appreciated, and respected at every encounter.

So if you like not just acquiring business but keeping the business coming direct to you, it only makes sense to make reputation the platform, the foundation, the starting point, the very first step of a revenue program.

Robin: I have to say I completely agree with you. You wouldn’t know that I come from the world of business travel, and there’s an awful lot of revenue on the line. You never know what particular guest is standing in front of you. And I think sometimes hoteliers might have the opinion that, well, we didn’t do too well with this one guest, but generally we do really well with others. Well, that one guest might have been the decision-maker for the entire business travel account.

And so you’re not just talking about the revenue of one traveler and maybe a few other people who read the review on TripAdvisor. You could be talking about a major account for the property for the entire year and evermore. So I wholeheartedly agree. This is terribly, terribly important because not just the Tripadvisor reviews, but the colleague to colleague reviews, they spread like wildfire as well.

Adele: A hundred percent. That personally happened to me where I really worked hard to get an account only to have a lackluster experience for a VIP at the front desk and lost the whole thing. So much time and energy wasted when it costs nothing to make someone smile and to make them feel great. It just takes a daily discipline of constantly talking about kindness, compassion, and about mission and purpose.

If you believe that your job is to hand people the keys, you will behave differently than if you believe it’s your mission to make everybody feel great about that connection. Make that human-to-human connection and know that you are there for that person to make sure that they have everything they need to have a great experience.

Robin: I like that word, mission. That’s a great concept. Let’s move on and tell everybody what is a net promoter score and why is this such a big deal in the hospitality industry? And I think I’d also like you to chat a little bit about what would you say is a good score? Because I thought I’d be really clever in preparation for our conversation, I thought I’d try and look up what the hotel industry average net promoter score is. And, you know, I found everything from one study saying it was 33, another one said 39, and a third one said 53 was a good score. And that’s quite a lot of variation.

Adele: They’re all not good scores. I’m sorry to say.

Robin: I knew you were gonna say that, but tell us why.

Adele: Well, this is the hospitality industry. We should do better. But here’s the thing, Robin. The people who had 80% guest satisfaction were telling the people with 70% how to get from 70% to 80%. You very rarely hear from people who have 90-something percent guest satisfaction. And not to brag, but you know what? The Library Hotel Collection, we worked very hard on every day getting a little bit better at our guest satisfaction.

And we saw our overall…according to ReviewPro, which has the global review index, they said that one year we were 93%, next year, 94%, the next year, 95%, and then we were 96.1%. We had the highest guest satisfaction of any luxury hotel brand in the world. Over all the big fancy names that you can…just imagine, our little small but mighty hotel company just did it building it brick by brick, one guest at a time, making sure everybody left happy.

So now we’re gonna talk about that net promoter score. Bain & Company created something called the net promoter score and the net promoter system. It is a fantastic concept that I did not hear until after I had already left the Library Hotel Collection. But it just so happens that during my whole time there, I looked at what people called guest service scores or customer service scores. And it seemed to be adding up the four-star and the five-star and what the overall percentage was.

So it is easy when you count the four-star and the five-star together as being your score. It makes you feel really good that you have such a high score. But it is somehow not truthful, and I always felt that there was something really wrong with that. Because if you have 100% 4-star, it’s a completely different level of experience if you have a 100% 5-star. And yet you count that that is the same score, it isn’t the same score.

Four-star reviewers, you know, Xerox, I read in the “Harvard Business Review” that Xerox did a study many years ago. And people who gave five stars were six times more likely to buy another Xerox machine than people who gave four stars because fine is not fine. Four is it was okay. You did what you said on the tin. I’m not in love. I’m not in love means I’m for grabs by the next hotel that builds nearby you, the next hotel that sends me an email with a special offer, etc.

But if I love a brand enough to give it five stars, I am much more durable as a loyal customer for life. And I’m much more likely to stay more frequently, to bring my friends with me, to look for upgraded experiences from your company, to look for other hotels within your brand, because I love what you’re about. And I feel a connection because I felt a connection with your people when I was there. So loyalty is much more related to five-star.

So NPS, the net promoter score system, is an open system. But classically, they begin with the question, what is your intent to recommend? So if it’s 1 out of 10, then a 9 and a 10 is a promoter, somebody that’s gonna talk up about you and come back and bring their friends. A seven or eight is neutral. They were fine. Not saying a lot bad or a lot good. It’s kind of a balance between the two. And if it’s six and below, you have a detractor. So you subtract the percentage of detractors from the percentage of advocates or promoters, and that’s how you get your net promoter score.

But in the hotel business, we have the good fortune of having people who already have recommended us. So we don’t have to ask, “Are you going to recommend us,” because we actually have review scores everywhere that tells us exactly what percentage of people are recommending us and which ones are detracting from us. So we have, I think even a better judgment, not on intention but of [inaudible 00:16:33].

So you can take the five-star reviews, ignore the four-star reviews, take the five-star reviews as the percentage of the total number of reviews. And you can do it for a particular period of time because you might wanna do it for the last year or the last quarter without including the scores that you had from 15 years ago when you opened or 10 years ago. So you can pick a time period for that. And that’s easy to do on most sites. And, of course, there are many tools that’ll make it super easy for you to do it.

But that actually tells you not what their intention is, but what they’ve actually put their time where their mouth is. And I find that to be a much more valuable tool because fine is not loyalty. Four-star is not loyalty. And we’re in it to win it when we’re only going for five-star reviews. I brought my stars with me today.

Robin: I think you’re absolutely right. And it comes back to what you were saying earlier about you have to have a team that believes it’s their mission to have this level of achievement and to serve every guest to the best of their ability.

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Let’s talk for a moment. I know a lot of hotels are big fans of having the mystery shopper come and then, you know, everybody cringes and waits for the report and there are huge meetings analyzing every line of the mystery shopper report. Or alternatively, getting social media influencers to mention the property. I’m not saying that these aren’t good things, but why is your net promoter score more effective?

Adele: Well, back in the day, I did love to hire very senior or sometimes retired hospitality people to come and actually stay in the hotel. Eventually, my team was onto them. But even so, someone who’s an experienced hotelier is sometimes able to articulate what is wrong while a guest may not be able to articulate specifically, would’ve been better to say this, or I had a problem with that. They look at it in a different way.

So it’s not a bad thing to do. But in the flood of data that we already have for free, at a certain point, I said, I don’t really need it. I have so much action points to take based on the nearly real-time data from actual guests who are telling me how they feel. And the problem that we have in the industry today is because one person who wasn’t necessarily a star at getting the highest level of guest satisfaction, because someone who was ready to settle for okay but not that bad, is telling the people who need to lift it up from that bad to a little bit higher.

So there’s a myth that what reputation management is about is responding to reviews in a polite and professional manner so that people feel heard. But the thing is that nobody’s buying that because you can just keep getting those negative comments and you’ve not changed anything. And you keep saying, thank you. We really appreciate your feedback. I’m gonna give that information to the appropriate department head. I mean, that review response could be written anywhere in the world by someone who’s never been to your hotel, or even the country the hotel is located in.

So what value are you adding? After a few responses like that to negative reviews and people see that the problems aren’t going away, the negative reviews are coming in saying the same thing again and again, well, people are not that foolish. They can figure it out pretty quickly that you’re not serious about it and you’re just wasting your time and money. But if you instead say my mission and my team’s mission, we are all together on this mission to solve problems, listen to feedback. This is the five-star review system. I’m giving it to you right now.

Set your intention what the mission is. Every guest that comes in, you want them to leave feeling they had a great experience, that they got a great value, that they were respected, appreciated, and cared for at every encounter. That everybody was nice to them. And, you know, value is really important. So it doesn’t really matter whether you’re a five-star hotel, or a two-star hotel, or a three-star hotel. Everybody deserves feeling that they got good value for money and that they were treated very well and cared about.

So if somebody gives you some feedback, instead of saying we are going to talk about it later, we’ll take it under advisement, actually, go up to the room and see with your chief engineer, or your housekeeping director, or assistant housekeeping director, whatever it is and look at that room with a couple of your team members and say, “This is what they were saying about the room. What can we do to fix that so that the next person coming into this room tonight or tomorrow or next week is not gonna have…”

Robin: No one is gonna have the same experience. I love your approach to having a team brainstorming micro innovations. And what can we course-correct today, right now, to change the next person’s experience?

Adele: Yes. If you live every day trying to learn a little bit more and trying to better…you know, you asked me what is a good score? A good score is a little bit better than what you had yesterday. If you’re always moving upward, eventually you will get to where you wanna be. If you always are thinking about how can I diminish friction and how can I elevate joy? And how can I elevate that joy not just for some people, which most hotels do well, they are able to, when they want to, really want to, they can make somebody happy, but you have to do it for everybody.

Robin: For everybody. Yeah. You can’t just have some people who are VIPs because other guests can see. Hey, he got something I didn’t. It doesn’t always work for you. I know that in your system, your last step is practically your most important one in which you talk about empowering the future and how that can positively impact revenue projections when you get it right. Talk to us just a little bit about that.

Adele: Do you mean empowering the team?

Robin: Yeah.

Adele: Well, empowering the team is truly everything. You cannot create a reputation in your executive office. I don’t care if you’re in the corporate office you wanna say what you think your reputation is. Your reputation is not what you say about yourself in the corporate office. It’s not what you say about yourself in the ads. It’s what the people actually feel about their experience. So if you want to have a fantastic reputation, you have to be the hotel that inspires those reviews. And it is not you in the executive office that’s inspiring those positive reviews. It is your frontline staff, the ones that are having the connection with the guests.

And it’s not just in operations. It’s also in marketing because time and time again, people look at a website and they see that there’s a pool and then they come to the hotel and the pool is closed, or they hear that there’s breakfast and then they come to the hotel and see that it’s only donuts and coffee. Just be honest about what you have and what you don’t have, even more importantly.

If you say you’re gonna have an evening reception and they get to the hotel and they find out that the three nights they’re there you don’t have an evening reception because you’re only doing it on the weekday, you know, Monday through Thursday, or vice versa, it’s disappointing. If you say you have breakfast every morning and they go downstairs at 9:00 a.m. and it’s already gone, you’re just creating your own level of disappointment. You’re creating those bad reviews over and over again.

And I saw one hotel struggling because they didn’t have room service menus for that person. They called down, it wasn’t in the room. It wasn’t anywhere. It was like this whole thing, you know, why don’t you go down to the front desk and get yourself one? And even then they were given a QR code to something that wasn’t the room service menu. And then at the desk went checking out, they got that feedback and they were still saying, well, you know, next month, we’re going to get new room servicemen and then we’ll take care of it. That means that you don’t respect any of the guests that are staying in the next month. That’s what it says to me.

You have to really show your respect for every guest and you have to live in that commitment to excellence. Don’t phone it in, live in that commitment to excellence. If you have someone who said, I didn’t know I was gonna be charged this fee, that fee, and the other fee when I got to the hotel, and the general manager responded, “We don’t share our policies with guests in advance.”

Robin: You know, I think I’m speechless.

Adele: That was her polite and professional response. So we have to really rethink our intentions when we get there. And instead, listen and say, how could I have avoided this problem and do that?

Robin: Yeah. I don’t know what you would say. I think one of my key pieces of advice to any manager who hears this is in any situation anywhere in the hotel operations, if it involves a guest, just simply pause and say, “How would I personally want to be treated? What would be satisfying to me at this particular moment in time?” What would you say?

Adele: You know what, there’s one hotel, oh, I wish I could remember who it was, but there is a company who said, “How would I like my mother to be treated?” And I think that that says a lot too because sometimes what’s comfortable for us, for me, I don’t need to have my room cleaned at all during my stay, unless I’m staying for several weeks. I don’t really need that. But other people feel differently.

So you have to think about what does your target audience care about? And if that’s what they care about, make it available to them and make it easy for them to make that choice, not put it in the hands of the guest, but actually ask them, “Would you like the housekeeping service? I’ll be happy to arrange that for you if you would.” And instead of saying you have to do this, do that, fill out this form, whatever. One huge company advertised and spent, I don’t know how many millions of dollars advertising not to go to book on OTAs, but to come directly to their website, right?

And they had this great price match guarantee. I don’t know if that was exactly how it was worded. And yet when I found that I could get a rate that was a little bit less from the OTAs, I called the hotel and said, I know you guys spent so much money on advertising and I’d like to book direct. So I just want you to match that. And the bureaucracy that I was put through was ridiculous.

But 24 hours later, the general manager called me and said, “Thank you so much for booking directly. It means so much to us, especially at these times when we’re trying to recover. We really appreciate people like you who go the extra mile to book directly.” But why couldn’t the front desk person just do it? Why aren’t they empowered?

Robin: Yeah. That’s an excellent point because it all starts with empowering the team so that they can act and that they believe that that’s what’s wanted of them. That it is their mission, their job to take whatever steps are necessary to look after the person in front of them.

Adele: I love that you said that, Robin, because one of the general managers at the Library Hotel Collection, John Tapoada, the general manager of the Casablanca Hotel, which was a very modest, sweet, cozy, little quirky, little home away from home that you stay at because everybody’s so nice and the hospitality is very generous, not because of how there were no views. You know, it wasn’t the bricks and mortar, it was the people.

And he said, my people find it easy to be generous because they know, they’re confident, they know exactly what’s expected of them. And they know that we care most of all about making sure that everybody leaves happy, even if it means we’re making a reservation for them in another hotel so that they can get what they need. We want to have the reputation of somebody who cares about other people. And because of that, they increased their average rate for like 75% because they were number one on Tripadvisor.

And you know what? When you increase your average rate like that, it means now you have the funds to actually make capital improvements that are meaningful for the guests as well. So as you solve the small problems along the way, you start to have more flexibility to solve the bigger problems.

Robin: Because your revenue has increased. And that’s what we’re all about. Adele, I wanna thank you so much for chatting with me today. It’s been an absolute pleasure to get to know you a little. You’ve been listening to “The Innovative Hotelier” podcast, brought to you by “Hotels” magazine. Join us again soon for more up-to-the-minute insights and information specifically for the hotel and hospitality industry.

You’ve been listening to “The Innovative Hotelier” podcast by “Hotels” magazine. Join us again soon for more conversations with hospitality industry thought leaders.